Scribd
Upload
9 views5 pages

Company

The document outlines reasons for company investigations, including the production of documents, investigation of directors' share dealings, and insider dealing. It also details types of meetings such as Annual General Meetings and Extraordinary General Meetings, along with their procedures and notice requirements. Additionally, it explains the differences between fixed and floating charges in debentures, including conditions for crystallization and priority during insolvency proceedings.

Uploaded by

Ahmed Pareker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
9 views5 pages

Company

The document outlines reasons for company investigations, including the production of documents, investigation of directors' share dealings, and insider dealing. It also details types of meetings such as Annual General Meetings and Extraordinary General Meetings, along with their procedures and notice requirements. Additionally, it explains the differences between fixed and floating charges in debentures, including conditions for crystallization and priority during insolvency proceedings.

Uploaded by

Ahmed Pareker
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 5

1) What are the reasons for a company investigation, explain 3 of them shortly.

❖ Production of Documents:
Authorities or investigators may require a company to produce specific documents (e.g., financial
statements, contracts, or correspondence) as part of an investigation into its operations, finances,
or compliance with laws.
General Motors LLC v. Ashton
In this case, the court denied a request for the production of documents related to an internal
investigation, emphasizing the protection of work products in corporate investigations.

❖ Investigation of Directors’ Share Dealings:


Focused on examining the share transactions made by directors to ensure there’s no insider trading,
misuse of confidential information, or violation of securities laws.
SEC v. Elon Musk
The Securities and Exchange Commission sued Elon Musk for allegedly failing to disclose his
acquisition of over 5% of Twitter shares within the required timeframe, raising issues of
transparency in directors' share dealings.

❖ Investigation into Insider Dealing:


Targets illegal trading activities where individuals trade shares or securities using non-public,
material information to gain an unfair advantage.
Fyffes Plc v. DCC Plc
This case involved allegations of insider trading, where the court examined the legality of share
dealings based on non-public information, setting precedents for insider dealing investigations.
2) What are the types of meetings and what are the procedures to call a
meeting?

❖ Types of Meetings:
1. Annual General Meeting (AGM):
- Applicability: AGMs are mandatory for public limited companies (PLCs) but optional for
private companies unless stated in their Articles of Association.
- Purpose: Approve financial statements, appoint auditors, declare dividends, and discuss
important shareholder matters.
- Timing: PLCs must hold their first AGM within 6 months after the end of their financial year.

2. Extraordinary General Meeting (EGM):


- Applicability: Convened for urgent matters requiring shareholder approval between AGMs.
- Purpose: Approve mergers, issue shares, amend Articles of Association, or address crises.
- Convening Authority: Can be called by directors or shareholders holding at least 5% of
voting rights under Section 303 of the Companies Act 2006.

❖ The Conduct of Meetings:


1. Chairperson:
- Appointed as per the Articles of Association to maintain order and ensure adherence to the
agenda.

2. Quorum:
- Defined by the company’s Articles. If unspecified, two members (or proxies) constitute a
quorum under Model Articles for PLCs.

3. Voting:
- Ordinary resolutions require a simple majority (51%), while special resolutions need 75%
approval under Section 282 and Section 283 of the Companies Act.

4. Minutes:
- Must be prepared and kept for at least 10 years under Section 355 of the Companies Act.
❖ Notice Requirements:
(a) Length of Notice:
- AGMs: At least 21 clear days' notice (Section 307 of the Companies Act).
- EGMs: At least 14 clear days for private companies and 21 days for PLCs unless shareholders
agree to a shorter notice period.

(b) Content of Notice:


As required by Section 311 of the Companies Act, the notice must include:
- Date, time, and location (or virtual link).
- Nature and purpose of the meeting.
- The text of any proposed resolutions, particularly special resolutions.
- Instructions on voting and proxy rights (Section 325).

(c) Serving the Notice:


Under Section 308 of the Companies Act:
- Methods: Notices can be sent via email, postal mail, or hand-delivered.
- Timing: "Clear days" exclude the day of sending and the day of the meeting.
- Proof of Service: Maintain records to confirm notices were delivered appropriately.
3) Explain the differences between fixed charges and floating charges
concerning debentures, including the conditions under which a floating charge
crystallizes and the priorities among various charges during insolvency
proceedings.

❖ Charges
It has been noted that in practice a debenture is a secured loan. A debenture may be secured in one
of two ways. It may be secured by a fixed charge or by a floating charge.

- A fixed charge is a security interest over specific, identifiable assets of a company that are not
intended to change or fluctuate frequently.
- A floating charge is a security interest over a class of assets that can change or fluctuate in
value or form over time (e.g., stock-in-trade, accounts receivable, or inventory).

❖ Crystallization:
When certain conditions (e.g., default, insolvency) occur, the floating charge "crystallizes" and
becomes a fixed charge over the assets present in that category at that time. A floating charge will
crystallize in certain circumstances:
• If the company goes into liquidation;
• If a receiver is appointed, either by the court or under the terms of the debenture;
• If there is cessation of the company’s trade or business;
• If an event occurs which, by the terms of the debenture, causes the floating charge to crystallize.

❖ Priorities amongst charges:


Sometimes problems may arise regarding the priority amongst various charges. This may occur
where there is an administrative receivership or where there is liquidation.
The general rule is that fixed charges which are effective from the time of creation have priority
over floating charges which only have efficacy from the time of crystallization.

❖ Priorities in Liquidation
➢ Liquidation fees and expenses.
➢ Fixed chargeholders.
➢ Preferential creditors (e.g., unpaid wages up to £800, accrued holiday pay).
➢ Floating chargeholders.
➢ Unsecured trade creditors.
➢ Deferred debts (e.g., unpaid dividends).
➢ Return of surplus assets to members based on class rights.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy